Mozambican business operators are calling for an injection of foreign currency into the national economy as a measure to accompany the announced reduction in the interest rate, easing exchange rate pressure, according to a statement from the business confederation, consulted by Lusa on Saturday.
To maximise the positive effects of monetary policy on the real economy, the CTA [Confederation of Economic Associations of Mozambique] argues that the reduction of the MIMO rate should be accompanied by more active interventions in the Interbank Foreign Exchange Market, namely through increased injection of foreign currency to alleviate exchange rate pressure, the business document reads.
Last Wednesday, the Bank of Mozambique cut the monetary policy interest rate (MIMO) for the 12th consecutive time, by 0.25 percentage points, to 9.25%, forecasting stabilisation but warning of the floods’ effect on prices.
Mozambican business operators believe that, given the reduction in the MIMO rate, the injection of foreign currency will also help reduce import costs and create a more stable environment for business planning.
“The combination of these measures would significantly strengthen the impact of monetary policy on the productive sector,” states the CTA, which, while recognising the socio-economic challenges—recently aggravated by the floods in the south of the country—welcomes the measure taken by the central bank.
The business organisation highlights that the reduction of the MIMO rate creates room for a decrease in bank credit costs, potentially benefiting companies through lower interest on investment financing, strengthened working capital, and greater predictability in financial management—crucial factors in an economic recovery context.
“The CTA positively welcomes this decision as a favourable sign towards the gradual improvement of financing conditions in the economy,” the document reads.
Mozambique’s key interest rate had been fixed at 17.25% since September 2022, following intervention by the central bank, which then began consecutive cuts starting on 31 January 2024, when it was reduced to 16.5%.
In March last year, the Bank of Mozambique cut the rate to 15.75%, with reductions repeated at every subsequent meeting, reaching 9.75% in September, 9.50% in November, and now 9.25%.
“However, given the worsening of these risks and uncertainties, the CPMO [Monetary Policy Committee] considers that the MIMO rate reduction cycle, which began in January 2024, is approaching its end,” said Bank of Mozambique Governor Rogério Zandamela during the announcement of the cut, recalling that this downward trajectory was initially forecast to last up to 36 months.
“The inflation outlook remains in single digits over the medium term. In December 2025, annual inflation settled at 3.2%, after 4.4% in November. We regard this as a success—a reasonable and low level of inflation. It is something we are proud of,” he pointed out.
The Monetary Policy Committee (CPMO) of Mozambique meets every two months, with the next meeting scheduled for 30 March 2026.
Source: Lusa